2021 Contribution Limits

The IRS has announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2020. For company retirement plans, the most recognized highlights include:

The following limits are going up for 2021:

• The annual additions limit for defined contribution plans increases to $58,000

• The annual compensation limit increases to $290,000

• The Social Security Wage Base increases to $142,800

The following limits will remain the same for 2021:

• The salary deferral limit for 401(k), 403(b), and 457 plans remains at $19,500

• The catch- up contribution limits for 401(k) plans remains at $6,500

• The annual additions limit for defined benefit plans remains at $230,000

• The compensation limit for determining who is a highly compensated employee remains at $130,000

Review the full list of contribution limit changes below and share with your plan participants!